Data

US state and local governments reported over 7.59 trillion in liabilities in 2020, an amount that exceeds their annual revenue and is equal to about 30% of Gross Domestic Product. Reason Foundation computed this total and its subcomponents by reviewing 30,000 audited government financial statements filed by state and local governments for their 2020 fiscal year.

Structure of the original data

The dataset was queries from the database on Feb 8.

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These ratio values were calculated:

     * "Liabilities/Revenues Ratio" = total_liabilities/revenues,
     * "Bonds Outstanding/Revenues Ratio" = bonds_outstanding/revenues,
     * "Net Pension Liability/Revenues Ratio" = (net_pension_liability - net_pension_assets)/revenues,
     * "Net OPEB Liability/Revenues Ratio" = (net_opeb_liability - net_opeb_assets)/revenues,
     * "Compensated Absences/Revenues Ratio" = compensated_absences/revenues,
     * "netted_net_pension_liability" = net_pension_liability - net_pension_assets, 
     * "netted_net_opeb_liability" = net_opeb_liability - net_opeb_assets

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Matching ACFRs cities with Census population

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Net Pension Liability

Governmental Accounting Standards Board Statement 68 requires governments to report underfunding of their defined benefit employee pension plans as a “Net Pension Liability”, and any overfunding as a “Net Pension Asset”. A single government entity may participate in multiple pension systems with varying funded status. If a government participates in one or more underfunded systems and one or more overfunded systems, it will report both a Net Pension Liability and a Net Pension Asset. For purposes of this study, reported assets are netted against liabilities to determine a governmentwide net pension position. The accompanying table lists government entities with the largest net pension liabilities in absolute dollars net of any reported assets.

Table 1 – State and Local Governments Reporting Largest Net Pension Liabilities, 2020

Net Pension Liability
State Entity Net Pension Liability
IL State of Illinois 143,346,569,000
CA State of California 92,089,623,000
NJ State of New Jersey 90,812,068,247
TX State of Texas 67,084,585,000
NY New York 46,376,874,000
MA Commonwealth of Massachusetts 41,643,152,000
CT State of Connecticut 39,840,819,000
IL Chicago 32,958,251,000
IL Rock Valley College District Number 511 28,720,071,173
KY Commonwealth of Kentucky 25,870,784,000

Net OPEB Liability

Other post-employment benefits (OPEBs) refer to retiree health insurance, life insurance, and any other retiree entitlement aside from pensions. Health insurance accounts for the overwhelming majority of OPEBs nationally. For an in-depth discussion of OPEBs, readers are encouraged to consult Reason Foundation’s 2021 study of this topic.

After the implementation of Government Accounting Standards Board Statement 75, reporting of Other Post-employment Benefits generally parallels that of defined benefit pensions. A government may report either a “Net OPEB Liability” or a “Net OPEB Asset.” If it participates in a mixture of underfunded and overfunded OPEB plans, it may report both a liability and an asset, which are netted for purposes of this study. The accompanying table lists government entities with the largest net OPEB liabilities in absolute dollars net of any reported assets.

Table 2 – State and Local Governments Reporting Largest Net OPEB Liabilities, 2020

Net OPEB Liability
State Entity Net OPEB Liability
NY New York 109,456,918,000
CA State of California 90,486,960,000
TX State of Texas 76,983,152,000
NY State of New York 66,006,000,000
NJ State of New Jersey 65,491,562,252
IL State of Illinois 58,996,493,000
CA Los Angeles County 25,921,499,000
CT State of Connecticut 23,023,169,000
NY Metropolitan Transportation Authority 21,117,000,000
MA Commonwealth of Massachusetts 17,486,660,000

Compensated Absences

Most employers, both public and private, offer paid vacation and sick leave as well as personal days. Some offer other forms of paid leave such as sabbaticals for educators. Typically, employers provide specific numbers of paid vacation, sick, and personal days per year, although many do not differentiate between types of leave and simply offer a number of paid time off (PTO) days that can be used for any purpose. Depending on the employer, unused PTO days are either forfeited at the end of each year or can be accumulated by the employee. Employers who allow employees to accumulate PTO pay out the value of unused days off at the time of separation (due to retirement or other reason). Public sector employers are more likely to allow employees to accumulate sick leave. According to the Bureau of Labor Statistics, 58 percent of state and local government employees were entitled to carryover sick leave from year to year without limitation, compared to only about 12 percent of private sector employees. The BLS data does not address accumulation of vacation leave, but it does show that public sector employees receive slightly longer vacations than their private sector counterparts. Under government accounting standards, state and local governments must report the liability associated with accumulated, unused PTO. The accounting term for this liability is “compensated absences” and the rules for reporting it are set forth in Government Accounting Standards Board Statement 16. In 2020, GASB began a re-examination of its compensated absence policies.

Table 3 – State and Local Governments Reporting Largest Compensated Absences Liabilities, 2020

Compensated Absences
State Entity Compensated Absences
NY New York 5,693,120,000
CA State of California 4,401,397,000
WI State of Wisconsin 2,593,896,000
OR SAIF Corporation 2,253,391,000
CA Los Angeles County 2,072,486,000
TX State of Texas 2,035,843,000
NY State of New York 1,358,000,000
NY Metropolitan Transportation Authority 1,061,000,000
CA Los Angeles 943,187,000
WA State of Washington 910,960,000

Others

Bonds Outstanding
State Entity Bonds Outstanding
CA State of California 109,854,424,000
NY New York 99,455,082,000
TX State of Texas 59,721,954,000
NY Dormitory Authority 58,215,000,000
NY Metropolitan Transportation Authority 51,013,000,000
MA Commonwealth of Massachusetts 41,939,680,000
IL State of Illinois 31,531,895,000
CT State of Connecticut 29,166,415,000
CA Los Angeles 29,056,349,000
WA State of Washington 26,732,746,000
Total Liabilities
State Entity Total Liabilities
CA State of California 408,305,319,000
NY New York 305,300,557,000
IL State of Illinois 263,404,811,000
TX State of Texas 250,250,365,000
NJ State of New Jersey 213,903,087,870
NY State of New York 188,872,000,000
MA Commonwealth of Massachusetts 113,588,290,000
CT State of Connecticut 97,821,884,000
NY Metropolitan Transportation Authority 92,447,000,000
WA State of Washington 84,090,857,000

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Note: Only show Revenues >= 1000000

Bonds Outstanding/Revenues Ratio
State Entity Name Bonds Outstanding Revenues Ratio
IA Tobacco Settlement Authority 748,135,062 2,882,887 259.51
OK Muskogee Industrial Trust 166,757,288 1,437,636 115.99
OK Rogers County Educational Facilities Authority 52,180,000 1,416,005 36.85
LA Louisiana Public Facilities Authority 116,611,681 3,862,243 30.19
LA City of Gonzales Industrial Development Board 49,614,679 1,699,927 29.19
OH Jerome Village Community Development Authority 71,528,926 2,691,552 26.58
OH The River South Authority 59,734,336 2,254,118 26.50
OK Rogers County Finance Authority 35,425,000 1,377,833 25.71
IN Indiana Bond Bank 851,986,930 33,240,329 25.63
OH Ohio Water Development Authority 5,248,829,688 214,314,695 24.49
Net Pension Liability/Revenues Ratio
State Entity Name Net Pension Liability Revenues Ratio
IL Rock Valley College District Number 511 28,720,071,173 171,503,108 167.46
MT Columbus School District No. 6 2,090,310,698 13,051,827 160.15
SC Cherokee County School Distirct 1 112,885,378 2,559,049 44.11
NJ Middlesex County Improvement Authority 2,261,409,556 91,960,390 24.59
CA Southern California Public Power Authority 1,566,611,000 65,685,000 23.85
WA Seattle 1,471,420,000 64,030,000 22.98
MO Saline County 221,083,491 11,195,433 19.75
NJ Brick BoardEducation Township 2,374,577,840 167,842,868 14.15
CA Union City 52,487,841 4,626,045 11.35
IL Wood Dale Fire Protection District 53,704,832 6,653,479 8.07
Net OPEB Liability/Revenues Ratio
State Entity Name Net OPEB Liability Revenues Ratio
SC Cherokee County School Distirct 1 91,170,845 2,559,049 35.63
CA Southern California Public Power Authority 992,316,000 65,685,000 15.11
WA Seattle 673,086,000 64,030,000 10.51
NY Massena 82,887,248 14,828,163 5.59
NY Cobleskill-Richmondville Central School District 230,266,120 44,700,555 5.15
NY Central New York Regional Transportation Authority and Subsidiaries 385,283,876 75,303,412 5.12
NY Arlington Central School District 1,009,500,307 219,657,517 4.60
NY Red Hook Central School District 258,268,198 56,306,225 4.59
NY Spackenkill Union Free School District 223,242,973 50,555,819 4.42
CT West Shore Fire District 44,607,973 10,133,181 4.40
Compensated Absences/Revenues Ratio
State Entity Name Compensated Absences Revenues Ratio
NY Long Beach 31,759,000 99,487,552 0.32
NY Central Islip Union Free School District 69,883,593 233,576,454 0.30
NY Glen Cove 15,931,865 56,873,828 0.28
NY Cortland 7,481,870 27,311,521 0.27
NY Nassau Community College 53,992,035 204,824,429 0.26
IA Shelby 721,284 2,983,886 0.24
NY Batavia City School District 12,471,015 52,173,977 0.24
PA Highlands School District 10,437,085 43,821,736 0.24
NY Grand Island Central School District 14,181,000 62,305,363 0.23
NY Depew Union Free School District 9,715,280 44,823,901 0.22
Total Liabilities/Revenues Ratio
State Entity Name Total Liabilities Revenues Ratio
GA School District Dougherty County 31,139,382,946 1,322,200 23,551.17
IA Tobacco Settlement Authority 751,433,035 2,882,887 260.65
OK Muskogee Industrial Trust 166,767,288 1,437,636 116.00
ME Richmond Utilities District 507,841,204 11,713,404 43.36
LA City of Gonzales Industrial Development Board 73,191,107 1,699,927 43.06
PR Puerto Rico Highways and Transportation Authority 8,777,193,750 206,331,396 42.54
TX Harris County Municipal Utility District No 423 42,871,046 1,021,777 41.96
PR Peñuelas 67,063,757 1,669,271 40.18
OH Jerome Village Community Development Authority 105,690,321 2,691,552 39.27
UT Utah Telecommunication Open Infrastructure Agency 461,216,203 12,098,508 38.12